You know those “Important Notices” you get in the mail from your bank and credit card companies? The ones filled with 25 pages of indecipherable fine print? Well, it turns out that sometimes there’s actually important information mixed in with all the legalese. At least if you want to avoid paying $119.40 in annual fees.
Bank of America just announced they’re raising their fees on most checking accounts in June, and as a customer I was surprised to discover that I could be charged $9.95 per month. According to their website, for “Standard Checking” accounts:
Starting June 5, 2009*, the Monthly Service Charge will be $9.95. This fee will no longer be discounted with direct deposit.
How to help prevent this charge:
- Maintain a minimum daily balance of $1,500.
- Maintain a combined balance of $5000 from linked savings or investment accounts.
I keep my money in a high-yield savings account to maximize my interest income, but to avoid this new fee I’d have to keep at least $1,500 in a checking account earning 0% APY. Not necessarily a huge problem, but definitely annoying. And not everybody has the kind of savings I do. For someone just getting out of school or making a big move, maintaining $1,500 is a tall order.
Even worse, in my opinion, is the fact that BofA is adding a new “extended overdraft fee” for overdrafts of more than 5 days.
As of June 5th, 2009, we will charge one $35 Extended Overdrawn Balance Charge for accounts overdrawn for 5 consecutive business days. This charge is in addition to applicable Overdraft Item Fees and NSF: Returned Item Fees.
So if someone spends $5 more than they have in their account, they are already charged a $35 fee. But now if they don’t repay the bank within 5 days, they’re charged another $35. So a $5 overdraft for 5 days would cost $70! I think that may actually be the worst deal I’ve ever seen, and I’ve shopped at Whole Foods.
That being said, I like the convenience of ubiquitous Bank of America ATMs, so for me, it may still be worth keeping my account (and maintaining a balance of $1,500 to avoid the monthly fee). But whatever bank you use, make sure to find out what fees they might charge you.
4 Comments
You say, “whatever bank you use…” look into their potential fees.
Are you saying there is more than one bank? I figured they were all merged together by now, with the CEO reporting to Chris Dodd or something. Whaddaya know.
Regarding the ubiquity of ATM fees, isn’t it possible to use any american bank card in any american ATM? In Australia this is possible for a nominal fee.
Thank God I use a credit union! (Not that you shouldn’t check their fine print, either.)
I just found out about this fee. I am struggling financially and it would seem that the banks are simply taking advantage of the people who can afford the least. I will be closing my other two savings accounts with BOA rather than pay these crazy fees.